OREANDA-NEWS. December 31, 2009. The Central Bank of Azerbaijan has made a statement on major directions of its monetary policy for 2010.

The statement says that in 2010 the Bank is to prepare a new mortgage model within the framework of improvement of mortgage mechanisms.

“In this connection the CBA will take measures on the beginning of activity of housing and building savings banks,” the statement says.

At the same time realization of social mortgage mechanism financed from State Budget will be continued.

With introduction of housing and building savings banks Azerbaijan will return to the idea of accumulative mortgage system after a two-year break.

In 2009 the CBA developed commercial mortgage at the expense of issue of unsecured bonds by the Azerbaijan Mortgage Fund.

The Bill on Building & Savings Banks due to which accumulative mortgage will be introduced, was coordinated by the government already in 2007.

The Bill was drafted with participation of foreign experts and fits the best samples, but additional assistance is required to introduce it. In this connection the CBA planned to apply for technical assistance of the German government where the system was born.

The new Bill supposes introduction of accumulative mortgage through specialized banks. In case of Bill adoption Commerzbank’s Baku office was ready to assist to development of Azerbaijan mortgage system.

Commerzbank was ready to act on German (accumulative) mortgage scheme whereas single bank that applied the system (Khalq Bank) refused from it after a year’s experiment.

A German scheme of accumulation system has been chosen to organize building & savings banks. The depositor will accumulate his first deposit in the bank for three years, and then (in 36 months) he will be extended a mortgage credit automatically.

Building and savings banks will run functions of deposit accumulation and effective placement, and then their mortgage crediting.

Placing of deposit finances is permitted only in first degree assets (state short-term bonds and NB notes). Such banks can be private or semi-state.